- USD/CAD is set to finish the week with losses of 1.22%.
- The University of Michigan Consumer Sentiment for August surprises the upside and boosts the greenback.
- US Fed officials are still committed to tackle inflation and reiterated their job is not done.
USD/CAD advances on Friday, erasing Thursday’s losses, after a positive US consumer sentiment report boosted investors’ appetite, propelling US equities higher while the greenback rose. At the time of writing, the USD/CAD is trading at 1.2773.
The USD/CAD exchanges hands above its opening price, but earlier in the European session, it tumbled to the daily low at 1.2739, but buyers moved in and lifted the pair above the 100-day EMA at 1.2795. Nevertheless, once the dust settled, the pair stabilized around current prices.
US data revealed during the morning lifted the USD/CAD above its 100-DMA when the University of Michigan showed that the US Consumer Sentiment improved from 52.5 foreseen to 55.1, reaching a three-month high. That is good news for the Federal Reserve; however, inflation expectations for a 5-year horizon jumped above the 3% threshold, while in the short-term, one year, decreased to 5% from 5.2% estimated.
Nevertheless, during the week, US inflation data pointed downwards, led by CPI down at 8.5%, while the PPI decelerated to 8.5%. However, Fed officials reiterated that even though data is welcomed, inflation still is “too high,” so the US central bank emphasized its commitment to tackling inflation.
On Thursday, San Francisco’s Fed Mary Daly said that inflation remains high and that she favors a 50 bps rate hike. However, she does not discount a 75 rate hike, but it would depend on data. On Friday, Richmond’s Fed Thomas Barkin said that inflation data is welcome, but he wants to see a sustained period of inflation under control. Barkin added he’s undecided about September’s FOMC monetary policy meeting.
In the meantime, the US Dollar Index is recovering some ground in the day, is up 0.56%, at 105.676, set to finish below the 106.000 mark.
What to watch
The Canadian economic docket will feature the Consumer Price Index for July, alongside Housing Starts and Retail Sales. On the US side, the calendar will feature the NY Fed Manufacturing, Housing data, Industrial Production, and Retail Sales.
USD/CAD Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.